International focus for fast-food firm
Holly Ryan BusinessDesk
and Restaurant Brands chief executive Russel Creedy says the company won’t be taking its eyes off New Zealand but international expansion is its focus.
The company posted a full-year profit result of $40.4 million for the year ended February 26 — up 32 per cent on the previous year.
Sales rose 49 per cent to $740.8m, largely boosted by the company’s recent acquisitions, with almost half of its sales generated overseas in the latest year.
Restaurant Brands holds the rights to the KFC, Pizza Hut, Starbucks Coffee and Carl’s Jr brands in New Zealand and has expanded its business to KFC in Australia and Taco Bell and Pizza Hut in Hawaii.
If the Australian and Hawaiian acquisitions had not happened, the company would be talking about a 5.4 per cent overall sales growth, Creedy said.
“The Hawaiian and Australian expansions have really changed the face of the company substantially so we have moved from a New Zealandcentric domestic business to really playing in the international market,” Creedy said.
“We couldn’t have grown ourselves by over $240m without Russel Creedy moving offshore so that has been absolutely key, and it’s flowed through to earnings and a significant dividend increase for shareholders.”
Yesterday the company detailed its plans for future growth, including expanding its KFC business in New Zealand and Australia and potentially acquiring KFC operations in Hawaii and the US.
It also plans to further develop its Pizza Hut business in New Zealand and Hawaii and may introduce the Taco Bell business to New Zealand and Australia, expand the business in Hawaii and potentially acquire Taco Bell operations in the US.
“The full effects of two major acquisitions is evident in this year’s financial results,” Restaurant Brands said.
“From a sound, established position in both the Australian and US (Hawaii) markets the company now has significant scope to expand further in both these geographies through acquisition, store refurbishments and organic growth. At the same time, organic growth opportunities within the New Zealand business will be pursued.”
The expansion has seen the company’s bank debt lift to $166.8m at the end of the financial year, from $46.5m at the end of the previous year. At balance date, it had bank debt facilities of $253m in place. In September last year, Restaurant Brands dual-listed on the Australian Securities Exchange to enable it to access additional pools of capital that may be needed to fund future acquisitions.
The company will pay a final dividend of 18c per share on June 22, taking its annual dividend to 28c, up from 23c a year earlier.
In the latest year, the company’s New Zealand operations lifted earnings before interest, tax, depreciation and amortisation by 6.5 per cent to $75.8m, largely due to the performance of its KFC business which increased ebitda 7.4 per cent to $66m.
It wrote down the value of its Carl’s Jr chain by $1.2m.
In Australia, ebitda jumped to $22m from $15m after the KFC business was acquired in April 2016. The Hawaii business, acquired in March 2017, contributed $24.1m in ebitda.
Restaurant Brands shares closed down 7c at $7.07.